BTC 'normalizing' much faster than anticipated post Halving...
BTC sees Difficultly drop but Hahrate is already starting to climb again...
BTC just saw it's second straight difficulty adjustment downwards...
Bitcoin has now seen two straight difficulty adjustments down since the halving roughly a month ago.
This is exactly how bitcoin is supposed to function.
When the halving reduced block rewards, it instantly made bitcoin more costly to mine.
The miners that were near break-even previously, now found themselves unable to continue mining as they would be operating significantly in the red.
They turn the machines off and the total computational power being put into mining bitcoin drops.
As this happens the total hashrate falls and the difficultly level adjusts downwards.
The only catch is that it takes time for this to happen.
The difficultly level adjusts every 2016 blocks which is roughly every 2 weeks.
This happens so that the network can continue 'solving' blocks roughly every 10 minutes.
This may be the last downward adjustment for the time being...
For those miners still needed further downward adjustment before they can get back in the game, it may never come.
The hashrate has already turned back up:
With the network hashrate already turning back up that means machines are already being turned back on and there is no reason to adjust difficulty levels downwards any longer to get that 10 minute block time.
If this continues we will only see 2 downward adjustments in difficulty post halving.
Which is actually one less than I was anticipating.
The interesting thing is that many are pointing to about $14k as the break-even average cost of mining bitcoin world-wide.
Some can mine for much cheaper than that, but we are still a long ways from that potentially break even price for many.
To me, that means we are either about to see bitcoin start moving towards that level or we are going to need to see some difficulty adjustments down as we march forward, which don't like likely at the moment.
I was fully expecting it to take a couple months post halving for things to fully 'normalize' again, but with the hashrate already climbing again, perhaps it is going to 'normalize' sooner than I expected.
I am still waiting (hoping?) for bitcoin to fill that $7,600 gap on the CME bitcoin futures charts, but with the recent price action and bitcoin already 'normalizing' to some degree, it may not be coming.
If it does just start climbing higher, hopefully it drags our favorite altcoins along with it! :)
Stay informed my friends.